ENCINITAS — The City Council voted unanimously to issue bonds to pay for the Encinitas Community Park and Moonlight Beach improvements despite some lingering objections by residents Wednesday.
The vote was the final step by the council to complete a drawn out process towards financing the projects.
On July 11, the City Council voted unanimously to finance the construction of the Encinitas Community Park and Moonlight Beach improvement projects through a mixture of bonds and reallocation of existing money earmarked for other capital projects.
None of the residents who spoke were in favor of borrowing money for the parks.
Craig Champion said he was generally supportive of the park but said he felt “hoodwinked” by the city because it had led the community to believe there was enough money to develop the former Hall property into a full-scale recreational park.
“I think bonds have their place for things like infrastructure and some school projects,” Champion said, “but not for recreational facilities, those are discretionary.”
Like other speakers, he voiced concern over the implications of carrying an $8 million lease revenue bond debt. “People think bonds are free money,” he said. “But they are far from it.” He urged the council to take a “pay-as-you-go” strategy rather than a financial debt strategy.
Tony Kranz, a city council candidate, called into question the council’s timing. “In 2006 this was a high priority capital project, we’re just now discussing this in 2012,” he said. “There’s an issue of credibility,” he said.
During the July meeting City Manager Gus Vina said staff recommendations for funding met several objectives, including maintaining the city’s good fiscal standing and that it “gets the job done.”
The construction cost for the park came in at $19.3 million after bids were higher than expected recently. Vina told the council that $7.8 million in existing funds would be coupled with $7 million in total reallocation funds, leaving $4.5 million in financing.
The 44-acre site purchased by the city in 2001 has been controversial throughout the various stages of planning. The property is partially surrounded by residential neighborhoods with the eastern edge adjacent to the freeway and its northern border along Santa Fe Drive.
Councilman Jim Bond questioned the legitimacy of the public’s argument against lease revenue bonds for the park construction. “There’s some serious campaigning going on here,” he said. “The council decided to borrow it for you, so you could have one of the best beaches and a park,” he said.
“What we’re trying to do is set Encinitas on the right path,” Bond said after giving a summary of his interpretation of lease revenue bonds.
Councilman Mark Muir said the option before the council was preferable to a general obligation bond which requires the imposition of a tax. “But no such tax exists with the lease revenue bonds,” Muir said.
Mayor Jerome Stocks said the city is in good financial shape and could take on the added debt. “The city of Encinitas’ bond debt ratio is about 8 percent,” he said. “We have historically been a pay-as-you-go thing,” he said. “The problem with that is that you end up with a lot of cans of money and you can’t get anything done.”
Stocks added, “This is a 20-year bond issuance, these amenities are going to serve us for 50 years. That’s a proper investment. I’m in favor of what we’re doing here.”
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Filed Under: The Coast News